What are the best Portuguese mortgages for non-residents?

If you're considering buying a property in Portugal as a non-resident, you may be wondering about your mortgage options. Luckily, numerous Portuguese banks offer mortgages to foreigners and Portuguese expats.

Read on to learn more about the best Portuguese mortgages for non-residents and how to compare offers quickly and without fees. Homevest, for instance, provides a fee-free mortgage comparison service in Portugal.

1. Santander

Santander is a Spanish banking group subsidiary that offers mortgage services for non-residents wishing to purchase property in Portugal.

With Santander, you can borrow between 75,000 and 1,000,000 EUR at a base spread of 1.90%, which is competitive in the Portuguese market.

Pros

• range of mortgage options with up to 80% financing available
• opportunity to reduce the interest rate by 0.80% with contracted products

Cons

• an opening fee of up to 1.5%, depending on the customer profile, which can increase the cost of securing a mortgage

2. UCI

UCI is another top Portuguese lender that offers up to 70% of the house purchase value, depending on the applicant's profile and the guarantees provided.

UCI offers a fixed-rate option for the first five years of the mortgage loan at 5.65%. After the first 5 years, it's 1.64% + Euribor 6m.

Pros

• the maximum loan amount a non-resident can access is €3,000,000.
• there is no need to translate documents, and most documents may be in their original language

Cons

• fewer product options than other banks.
• an opening fee of €312, which can increase the cost of securing a mortgage.

3. Novo Banco

Novo Banco offers various solutions for non-resident foreigners who need banking services in Portugal. The bank offers fixed-rate and variable-rate mortgages tailored to your specific situation. It also provides insurance and investment funds for non-resident foreigners.

Pros

• provides financing options of up to 80% for non-residents from the EU, UK, Canada, and the USA, for the purchase of a second home
• free life insurance

Cons

• the appraised value or estimated cost of construction and works is always determined by appraisers employed by Novo Banco and certified by the CMVM. This can add additional costs and extend the duration of the mortgage process

4. BPI

BPI offers a variety of mortgage options for non-residents looking to buy a second home in Portugal. Their mortgage for non-residents provides flexibility with fixed and variable rate options, with terms of up to 30 years.

Pros

• The mortgage program allows for a loan amount range of 75,000 to 1,500,000 EUR
• Accepts several currencies, including EUR and GBP, and applicants from various nationalities and residency countries, making it highly accessible for a diverse range of non-residents

Cons

• The maximum loan-to-value ratio is 70%, meaning applicants would need to finance at least 30% of the property's value independently
• The debt-to-income ratio should not exceed 35%, potentially excluding those with higher levels of existing debt
• An opening fee of up to 1.0%, which can increase the cost of securing a mortgage

5. Crédito Agrícola

Crédito Agrícola offers both fixed and variable-rate mortgages extending to 30 years. This long repayment term facilitates manageable installments, easing the financial pressure on borrowers.

Pros

• an impressive loan amount ranges from 75,000 to 2,000,000 EUR
• accepts applicants from various nationalities and residency countries
• opportunity to reduce the interest rate by 0.45% with contracted products

Cons

• Crédito Agrícola limits its mortgage offerings to those earning in Euros and applying from abroad
• the maximum LTV ratio is 70%, meaning buyers need to have at least 30% of the property's value available for the down payment
• the indebtedness must not exceed 35%

6. Millennium BCP

Millennium BCP is a popular choice for non-residents seeking a mortgage in Portugal. They offer various mortgage options with competitive rates and favorable terms.

They don't have a favored applicant profile but prefer doctors, engineers, lawyers, and digital nomads. The applicant's net income is one of the most important things in their assessment.

Pros

• quick and straightforward application process
• mortgages can be signed in even less than 1 month
• the maximum DTI (debt-to-income ratio) ranges from 20% to 30%, depending on the financial profile. Millennium BCP does not consider whether the client has other credit products in their home country, nor do they request loan or mortgage contracts

Cons

• a minimum property purchase amount of 100,000 euros, which might not suit all borrowers
• the mortgage process is not fully online; physical presence is required for signing the agreement

7. Bankinter

Bankinter is a subsidiary of the Spanish bank of the same name. It offers various mortgage options for non-residents in Portugal, including financing up to 80% for purchasing a second home.

Pros

• Bankinter provides non-residents with promotional fixed-rate mortgage options with terms ranging from 1 to 30 years
• the process of applying for a Bankinter mortgage is 100% online, except for the visit to the notary's office

Cons

• Higher costs due to fees applied by Bankinter
• Bankinter imposes charges for early mortgage repayment, which could be costly for those who wish to pay off their mortgage early. The fees are 0.5% for variable-rate mortgages and 2% for fixed-rate mortgages

8. CGD - Caixa Geral de Depositos

CGD offers various mortgage solutions for those interested in investing in Portugal, whether to buy, build, or renovate a home. They provide financing up to 80% of the property's valuation (75% for buy-to-let properties), with the amount not exceeding 80% of the purchase, construction, or home improvement costs.

Pros

• they offer up to 90% financing if you plan to buy a property for permanent residence in Portugal
• mortgage terms range from 1 to 30 years, to be repaid by age 80
• access to special conditions when buying a property from the bank's portfolio, Caixa Imobilário

Cons

• tends to have higher pricing on mortgage offerings

Comparison of the 8 Portuguese mortgages for non-residents

The cost comparison was made on April 15, 2024

This comparison includes the variable mortgage interest rate, but there are also other costs that you should consider when analyzing the bank fees.

In summary

When considering mortgage options for buying a property in Portugal as a foreigner, it is essential to consider the interest rates and the additional costs and fees associated with each loan. While some lenders may offer lower interest rates, they may also have higher fees that could make the overall cost of the mortgage higher.

To ensure that you are getting the best deal possible, compare multiple lenders and their offers before making a decision. It can be time-consuming, but fortunately, platforms like Homevest can help simplify it for you.

By comparing mortgage options and utilizing tools like Homevest, you can feel confident that you are making an informed decision and getting the best possible deal for your new property.

Frequently asked questions

What are the qualifications for a mortgage loan in Portugal?

The qualifications for a mortgage loan in Portugal can vary depending on the lender. However, in general, some of the requirements for obtaining a mortgage loan in Portugal may include:

• adequate income - most Portuguese lenders are open to accepting almost all types of foreign income, except from countries facing international sanctions.
• good creditworthiness - having a good credit score can increase the chances of being approved for a mortgage loan.
• down payment towards the property purchase - 20%-50%
• a maximum debt-to-income level of 35%
• an LTV ratio of 75%-80%

Fixed or variable interest rate. What's the difference?

A fixed-rate mortgage means that the interest rate is locked in for the life of the loan and will not change, regardless of any changes in the market. This means that your monthly payment will remain the same throughout the loan term, providing a predictable and stable payment schedule.

On the other hand, a variable-rate mortgage means that the interest rate can change over time based on the current market conditions.

Portugal has long been a popular destination for foreigners, who have settled there or invested in a holiday home.

If you're considering doing the same, it's important to understand the process involved. Keep reading a guide that covers everything you need to know when getting a mortgage in Portugal as a non-resident.

If you need someone to help you find the best deal, a mortgage broker can connect you with various banks and financial institutions. To better understand the role of a broker in your journey, discover how a UK citizen used Homevest to secure a mortgage and buy a property in Portugal.

Sources used and checked on April 2024:

1. Millennium BCP Mortgages
2. Santander mortgages
3. Caixa Geral de Depósitos Mortgages
4. Novo Banco Mortgages
5. BPI Mortgages
6. Crédito Agrícola Mortgages
7. UCI Mortgage in Portugal for non-residents
8. Bankinter mortgages for non-residents

We recommend obtaining professional or specialist advice before taking or refraining from any action based on the content in this article. The information in this article does not constitute legal, tax, or other professional advice from Homevest Limited. Prior results do not guarantee a similar outcome. We make no representations, warranties, or guarantees, whether express or implied, that the content in this article is accurate, complete, or up to date.